Is the idea of selling your home tempting even though you love it? We get it! The extra cash would be nice. Luckily, you can make more money by staying in your current home and investing in San Diego real estate. Here’s how!
Home Equity Loans Versus Cash-Out Refinances
If you want an investment property in San Diego, you can leverage the value of your current home. Going this route gives you two main options: a home equity loan and a cash-out refinance.
When you take out a home equity loan, you’re using your current home as collateral. That means if you have trouble paying back the loan, you do risk foreclosure. Of course, there are limits to the amount you can borrow which are determined by the amount of equity you currently own in your home. You can usually borrow up to 85% of this amount. Make sure to shop around for your home equity loan as the terms can vary widely.
On the other hand, with a cash-out refinance, you can actually take out a loan that’s worth more than your current home. This loan will essentially replace your initial mortgage. You get the difference between your initial home loan and the new loan in cash. This is the money that you can use to invest. With this option, you’ll often get better interest rates than with a home equity loan. Because the cash from a cash-out refinance isn’t considered income, you won’t have to worry about paying taxes on it.
Invest in San Diego Real Estate with the Help of the Horton Realty Team
After you’ve chosen the right method for leveraging the equity in your existing home, it’s time to find your investment property. Once you find it, you can get steady rental income and one day make big money by re-selling the property.
While using the equity in your home to invest in another property is certainly a decision that should be made carefully, it can definitely pay off in the end! If you need help finding your investment property in San Diego, get in touch with the Horton Realty Team. We’d love to help you make money on your home without selling,